New Jersey has tremendous economic assets, but a disadvantaged business climate makes it more difficult for companies to start up, grow, and succeed here, NJBIA Chief Government Affairs Officer Christopher Emigholz told a Senate committee on Thursday.
The state needs an interconnected strategy prioritizing: workforce development, infrastructure investment, innovation and manufacturing growth, affordability and tax competitiveness, and regulatory reform, Emigholz said.
Emigholz was among the business leaders invited by the Senate Economic Growth Committee to testify on ways to make New Jersey a more attractive place to start and grow businesses.
“New Jersey possesses extraordinary economic assets: a highly educated workforce, strategic geographic location, world-class research institutions, leading pharmaceutical and logistics sectors, and proximity to major global markets,” Emigholz said in his testimony.
Yet despite these advantages, New Jersey’s 4.9% unemployment rate for March exceeds the national average (4.3%) and that of neighboring New York (4.6%) and Pennsylvania (4.2%), Emigholz said. This is, in part, caused by New Jersey’s disadvantaged uncompetitive business climate, he said.
“New Jersey businesses face significant affordability and competitiveness challenges that make it more difficult to attract investment, grow businesses, and retain residents,” Emigholz said. “Affordability remains the single greatest economic challenge facing New Jersey businesses.”
Affordability
New Jersey is just one of two states (the other is Marlyand) that carries the unique burden of being in the top third of the country in each of four major taxes – income taxes, corporate taxes, sales taxes, and property taxes. Moreover, the FY27 state budget proposal would further increase costs on job creators amidst increasing U.S. economic uncertainty.
“Economic growth requires a stable and competitive tax environment, not the threat of new taxes every year that undermine tax planning and business investment,” Emigholz said.
To make New Jersey more affordable, the state must:
- Hold the line on spending growth in its annual budget
- Avoid new business taxes or employer assessments
- Pursue long-term structural reforms to lower property taxes
- Reduce healthcare cost pressures where possible
- Sunset the highest corporation business tax in the nation
Workforce Development
New Jersey employers across nearly every industry continue to report workforce shortages and skills gaps. These shortages affect healthcare, manufacturing, construction, transportation, hospitality, utilities, technology, and public-facing government services, Emigholz said.
“The challenge is not funding, because New Jersey already invests substantial resources into workforce development through multiple departments, programs, boards, and initiatives,” he said. “The greater challenge is coordination and alignment with employer demand.”
Emigholz recommended these actions:
- Better align workforce development resources across departments and agencies
- Expand employer-led apprenticeship and work-based learning programs
- Strengthen partnerships between employers, county colleges, vocational schools, and labor organizations
- Increase support for industry-recognized credentials and rapid upskilling programs
- Improve awareness and accessibility of existing workforce training grants for small businesses
Infrastructure Investments to Support Growth
New Jersey must continue investing in transportation infrastructure, housing, energy generation, water systems, broadband, and logistics networks that support both residents and employers. Emigholz noted that housing affordability has become one of the most significant barriers to hiring and retention because employees cannot afford to live where the jobs are.
To address this affordability problem, the state should:
- Encourage construction of workforce housing
- Support redevelopment and adaptive reuse projects
- Streamline local and state approval processes
- Promote transit-oriented development near existing infrastructure
- Because affordable energy is foundational to economic competitiveness, Emigholz said the state should pursue an “all-of-the-above" energy strategy that includes nuclear, renewables, natural gas, grid modernization, transmission upgrades, and storage technologies.
Innovation & Manufacturing
Innovation has long been a defining strength of New Jersey’s economy, and the state should continue making investments in areas where it already has advantages such as life sciences, biotechnology, film and media, logistics, clean energy technology, artificial intelligence and research commercialization, Emigholz said.
“Manufacturing remains especially important in the innovation ecosystem because it supports high-paying jobs, supply chain activity, exports, and regional economic stability,” Emigholz said.
"NJBIA strongly supports restoring budget funding for the New Jersey Manufacturing Extension Program (NJMEP), which has played a vital role helping manufacturers enhance their workforce, improve productivity, adopt modern technologies, strengthen cybersecurity, and retain jobs. The state should also consider restoring a modernized version of the Manufacturing Voucher Program (MVP), which previously helped small and mid-sized manufacturers invest in equipment, innovation, and operational modernization.”
Regulatory Reform & Government Efficiency
New Jersey must continue modernizing its regulatory environment and improving government responsiveness, Emigholz said.
"Businesses consistently report that delays, uncertainty, duplicative reviews, and inconsistent permitting processes increase costs and make investment decisions more difficult,” he said. “A more transparent, predictable, and efficient regulatory system benefits businesses of all sizes while improving overall public confidence in government operation, thus saving all of us time and money to make New Jersey more competitive.”
Specifically, the state should maintain the proposed FY27 state budget investments in:
- Permit modernization
- Licensing reform
- Greater transparency and accountability
- Digital government systems
- Interagency coordination
- Small business support through the New Jersey Business Action Center
- Stronger customer service standards
Rolling back the Murphy administration’s flood-elevation rules would be a welcome sign that New Jersey is moving in the right direction to ease regulatory burdens, Emigholz said. The same should be done for the new labor rules adopted by the Sherrill administration that will make it more difficult for businesses to hire independent contractors in New Jersey.
“The recently adopted ABC rules for independent contractors are just the opposite (of easing regulatory burdens) and show that New Jersey still stubbornly cannot get out of the way of economic growth,” Emigholz said.
Go here to read Emigholz’s entire testimony.
